HP Inks eHospital Deal - Analyst Blog


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HP Enterprise Services UK Ltd., a subsidiary of Hewlett-Packard Company ( HPQ ), revealed that it has entered into an agreement to provide technical support to the Cambridge University Hospital of NHS foundation trust. The deal, worth $210 million, is a 10-year technical support agreement, wherein HP will provide the necessary support to CUH's eHospital program.

This will help the healthcare provider offer a true digital hospital environment by enabling effective clinical decisions and will help in improving overall quality of patient safety, resulting in better patient care.

As per the terms of the agreement, HP will work in collaboration with the CUH in order to build a secure, robust, integrated IT environment, which will help clinical staff identify each patient's clinical and administrative information using the electronic patient record system.

As per a new Accenture survey covering the eight key international markets, the global EMR/EHR market is slated to grow to $19.7 billion in 2013. Therefore, there is a good opportunity for HP to tap this market.

HP is already providing EMR solutions to companies across the globe. Some new offerings are giving way to renewed deals on a regular basis. More hospitals and clinics are taking the help of IT companies to efficiently manage their records.

Although the company's new offerings are gaining acceptance, it might not have a remarkable effect on its near-term revenue. However, resultant revenues could help offset the shrinking PC business. The new product mix is a strong step taken to improve the profitability of the company.

Apart from storage, the company is also exploring other segments like data analysis, information management, security and software. Although the cloud offers plenty of opportunities, tough competition from Salesforce.com ( CRM ), IBM ( IBM ) and Accenture Plc . ( ACN ) is a challenge.

Currently, Hewlett-Packard carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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